Clayton W. Plotkin - Page 12




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          respondent’s determination as to the section 72(t) additional               
          tax.                                                                        
          C. Accuracy-Related Penalty                                                 
               Pursuant to section 6662(a), respondent determined an                  
          accuracy-related penalty of 20 percent of the amount of the                 
          underpayment attributable to a substantial understatement of tax.           
          In the alternative, respondent imposed the accuracy-related                 
          penalty on the amount of the underpayment due to negligence or              
          disregard of the rules and regulations.  Respondent’s                       
          determinations are presumed to be correct, and petitioner bears             
          the burden of proving that the accuracy-related penalty does not            
          apply.  See Rule 142(a).                                                    
               A substantial understatement of tax is defined as an                   
          understatement of tax that exceeds the greater of 10 percent of             
          the tax required to be shown on the return or $5,000.  See sec.             
          6662(d)(1)(A).  The understatement is reduced to the extent the             
          taxpayer has (1) adequately disclosed his or her position and has           
          a reasonable basis for the tax treatment of the item, or (2) has            
          substantial authority for the tax treatment of the item.  See               
          sec. 6662(d)(2)(B).  Section 6662(c) defines “negligence” as any            
          failure to make a reasonable attempt to comply with the                     
          provisions of the Internal Revenue Code, and “disregard” as any             
          careless, reckless, or intentional disregard.                               






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